Scoda Tubes Ltd.: Slight miss; structural thesis intact - Company Update
01 Feb 2026
Blog
We retain BUY rating on Scoda Tubes but upward revise target price of Rs 250 (previously Rs 240). Increase in target price is mainly due to valuation rollover. Q3FY26 was a strong performance on offtake, marginally offset by pricing weakness and delay in start of new seamless capacity. Margins were a slight miss due to adverse product mix. We expect revenue to rebound in Q4FY26 due to full quarter of production at new capacity and strong order book. Robust demand from the power sector, expanding global approvals, low threat from new entrants and sustained supply tightness reinforce our conviction for re-rating, alongside improved cash conversion and a fierce 20%/ 39% EBITDA/ PAT CAGR over FY25-28E. With the recent share price correction, Scoda is trading at very attractive valuation of 9x FY28 PE. Re-iterate BUY.
Scoda Tubes Ltd. (SCODATUBES) Stock Price Chart
Strong volume growth; offset by weak pricing:
Scoda reported Rs1.52bn of revenues; +17% yoy; +5% qoq; slight lower than our estimates of Rs1.65bn. Weak pricing and delay in start of commercial production at the new seamless SS pipes capacity was the main reason for the miss.
Unfavourable product mix affects margins:
Scoda reported margins at 15.1%; -270bps; -27bps qoq in Q3FY26, converting into an EBITDA of Rs230mn; flat yoy; +3% qoq. The decline in margin was mainly due to high contribution of pipes in the product mix. Sales of low margin hollow tubes also led to drag on margins. Further, the increase of depreciation (due to commissioning of new seamless capacity) and low other income (cash utilized in working capital) led to a PAT of Rs115mn; +18% yoy; -18% qoq.
What drives our conviction in the thesis?
The new seamless SS pipes is now fully operational and is expected to yield higher offtake in Q4FY26, in turn resulting in better margins. The fundamental conviction in Scoda is driven by strong underlying market demand and a deficit on supply. The Power sector is forecasted to be the primary demand driver for the 3-5years, supported by major thermal power capacity additions announced by NTPC and Adani Power. Scoda is well-positioned to scale up utilization from the newly secured approvals at entities like ADNOC, SABIC, Reliance, BARC. This will be further supported by large BHEL tenders that require Indian-made products and increasing presence in the US and Europe. We have cut our earnings estimates by 8%/ 6% resp. in FY26/ FY27E to account for the lower offtake in FY26. Remain positive.
Valuation, view & key risks:
We value Scoda tubes at a 19x Dec’27 PE (unchanged) to arrive at a TP of Rs250/sh (previously Rs240) and retain BUY rating. The increase in TP is due to valuation rollover offset by cut in earnings. Key Risks: Weakness in export demand, commodity price risk, delay in setting up of new welded plant.
Company website: https://www.scodatubes.com/
| Rating | BUY |
|---|---|
| CMP* | INR 125 |
| Target Price | INR 250 |
| Upside | 100% |
*CMP is as per report published date
Click to download the full Scoda Tubes Ltd Q3FY26 Company Update
Analyst:
- Sahil Sanghvi - Research Analyst, Institutional Equities (NISM-201900004744)
- Uvais Khatri - Research Associate, Institutional Equities (NISM-202300049054)
FAQs on Scoda Tubes Ltd Q3FY26 Company Update
These FAQs highlight key takeaways from MNCL’s institutional equity research on Scoda Tubes, covering performance trends, growth drivers and risk factors relevant for long-term investors.
1. What is MNCL’s rating and target price for Scoda Tubes?
MNCL has maintained a BUY rating with a revised target price of ₹250, implying significant upside from the current market price.
2. Why did Q3FY26 performance miss expectations?
The miss was due to weak pricing, an unfavorable product mix and delays in the start of commercial production at the new seamless capacity, which impacted margins.
3. What will drive growth going forward?
Full-quarter contribution from the newly operational seamless capacity, strong order visibility and improved utilization are expected to support revenue and margin recovery from Q4FY26.
4. Which sectors are expected to drive demand?
The power sector is expected to be the key demand driver over the next 3–5 years, supported by large thermal capacity additions by NTPC and private players.
5. What are the key risks to monitor?
Weak export demand, volatility in commodity prices and delays in commissioning new facilities could impact earnings visibility.
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We upgrade our rating on Triveni Turbine to BUY, supported by improving execution visibility and a gradual recovery in order inflows. While new applications such as CO₂-based energy storage, MVR, and turbine servicing are likely to be incrementally...
The Anup Engineering: Through the Trough, Recovery in the offing - Company Update
We upgrade our rating on The Anup Engineering to BUY (previously HOLD) and revise our target price to Rs 2,515. The company is not yet out of the woods, with the market awaiting clear signs of a recovery in order inflows. That said, we believe the wo...
Saksoft Ltd: Temporary headwinds, normalization in sight - Company Update
We maintain our "BUY" rating with a revised target price of Rs 285 (vs 325). Saksoft delivered weak results – a) topline growth saw a de-growth of 3% despite the favourable currency mix, b) Top 2 clients have cut spends in Q3, the pain co...
Mayur Uniquoters: Riding export momentum - Company Update
We maintain our BUY rating on Mayur Uniquoters with a revised target price of Rs. 825 (earlier Rs. 770), as we roll forward our valuation to Q3 FY28E and upgrade our FY27E/FY28E earnings estimates by ~4%. The company delivered a robust operating perf...
Scoda Tubes Ltd.: Slight miss; structural thesis intact - Company Update
We retain BUY rating on Scoda Tubes but upward revise target price of Rs 250 (previously Rs 240). Increase in target price is mainly due to valuation rollover. Q3FY26 was a strong performance on offtake, marginally offset by pricing weakness and dela...
TD Power Systems: Global demand fuelling growth visibility - Company Update
We upgrade TD Power to BUY / revise our target price upwards to Rs 875 (vs. Rs 840 earlier). Q3-FY26 results were a tad lower than our expectations and reflect timing issues rather than demand or competitive weakness. Going ahead, the Tumkur facility...
SJS Enterprises Ltd - Premiumisation and Export-led Outperformance - Company Update
We revise our target price on SJS Enterprises upwards to Rs2,190 to account for an increase in revenue/ margin estimates, and valuation roll-forward to Dec’27E. SJS delivered another quarter of strong industry outperformance, with record profitabil...
Sundram Fasteners Ltd.: Exports spoil the show - Company Update
We lower target price to Rs 1035 (previously Rs 1085) and maintain Accumulate rating for Sundram Fasteners Ltd. (SFL). We downward revise our multiple to account for extended weakness on exports including delay in EV order to North America, in turn l...
ASK Automotive Ltd. - Firing on all cylinders - Company Update
We upgrade ASK Automotive to BUY rating on attractive valuation and increase our TP to Rs590 (Rs525 previously). The increase in TP is largely driven by valuation rollover. ASK delivered a strong Q3, materially ahead of our expectations, led by broad...
Kirloskar Ferrous Ind. - Casting and tubes outperform, spreads spoil the show | Company Update
We lower our target price to Rs 620 (previously Rs690) and retain BUY rating for Kirloskar Ferrous Industries Ltd. (KFIL). The decrease in TP is mainly to account for weak commodity spreads and realization across end products . KFIL’s 2QFY26 perfor...
IFGL Refractories Ltd. - Domestic focus continues to payoff; overseas improving gradually | Company Update
We decrease target price to Rs 280 (previously Rs 300) but maintain BUY rating. The change in TP is mainly due to cut of earnings estimates. IFGL delivered another quarter of strong standalone growth as its domestic-focused strategy continues to gain...
Borosil Ltd. - Glassware ignites growth; levers to power margins | Company Update
We reiterate our BUY on Borosil Ltd and revise our target price upwards to Rs. 460 (vs. Rs. 420 earlier), driven by strong demand momentum and emerging structural growth and margin levers. The company continues to deliver robust growth in its glasswa...
Venus Pipes & Tubes Ltd. - Export and welded drives confidence | Company Update
We increase Target Price to Rs 2040 (previously Rs1,950) and retain BUY for Venus Pipes & Tubes (VENUS) due to attractive valuations. Increase in TP is primarily due to valuation roll forward. Revenue in 2QFY26 was strong, supported by a sharp re...
ESAB India - Encouraging quarter; growth in focus | Company Update
We retain Buy on ESAB India with TP revised upwards to Rs 6,850 (vs Rs 6,554 earlier) on valuation rollover. The company delivered a strong quarter, with overall growth hinting at signs of recovery supported by margin gains. ESAB continues to o...
The Anup Engineering - All eyes on cash conversion | Company Update
We maintain our HOLD rating on Anup Engineering but increase TP to Rs 2,475 (vs Rs 2,375 earlier) considering steady operational performance and an unchanged growth outlook coupled with valuation rollover. The impact from higher taxes was anticipated...
Rashi Peripherals Ltd – Turns cashflow positive
We retain "BUY" rating with a Target Price of Rs. 505 (vs Rs 525 earlier). Rashi Peripherals ltd reported decent topline growth, on the back of strong sales from the PES segment (PCs, Desktops). Our dealer checks suggest demand is improving for AI-en...
Wonderla Holidays - Chennai on Track; Expansion Visibility Low | MNCL Research Update
We reiterate our HOLD rating on Wonderla Holidays Ltd while revising our target multiple downwards to 18x (from ~20x) and rolling forward our valuation to Q2FY28E. In a seasonally weak quarter, the company delivered a better-than-expected topline, pr...
R Systems International - Strong growth tempered by higher SG&A & RSU costs | MNCL Research Update
We maintain our "BUY" and retain our target price to Rs 620. R Systems delivered higher than expected topline growth (7.9% vs our estimate of 3.5% in INR terms). EBITDA was in line with our estimates / margins dipped 70bps QoQ on the back of higher R...
SJS Enterprises Ltd - Designed to outperform | MNCL Research Update
We revise our target price on SJS Enterprises upwards to Rs1,930 to account for an increase in revenue/ margin estimates, valuation roll-forward to Sept’27E and target multiple expansion. SJS delivered another quarter of strong industry outperforma...
Channel checks - Opalware and Glassware - Borosil Sets the Benchmark in Opalware Retail
We conducted channel checks across key markets in Western and Northern India to gauge demand trends (qualitative aspects) in the Opalware and Glassware categories. We also analysed balance sheet / profitability trends (quantitative parts) across key ...
Goldiam International - LGD Momentum builds; ORIGEM scaling | Company Update
We reiterate our BUY rating on Goldiam International with a target price of Rs. Rs.470. Despite near-term uncertainty around U.S. tariff implications, the company has delivered an exemplary performance driven by robust topline growth and increasing w...
ASK Automotive Ltd – Meets Expectations; ALPS & Aftermarket to Drive Growth | MNCL Research Company Update
We retain ACCUMULATE on ASK Automotive while lowering our target price to Rs 525. The lowering of TP follows downward revision in our revenue and margin estimates, partially offset by valuation rollover. ASK delivered a strong Q2, broadly in line wit...
Sundram Fasteners Ltd. - Steady Domestic Momentum Offsets Export Weakness; upgrade to Accumulate - Company Update
We increase target price to Rs 1085 (previously Rs1030) and upgrade our rating to Accumulate for Sundram Fasteners Ltd. (SFL) due to steep correction in share price. Increase in TP is mainly due to valuation roll forward. SFL’s performance in 2QFY2...
JNK India Ltd – End of Overhang, Execution to Drive Growth | Q2FY26
Our interaction with JNK India led to the following conclusions: JNK India’s legacy low-margin orders (NRL, IOCL) delayed by site and client issues are expected to conclude largely by Q2FY26, with minor spillover into Q3FY26. From Q3FY26, high-marg...
Ratnamani Metals and Tubes Ltd. - Subsidiaries outperform | Company Update
We increase target price to Rs 2710 (previously 2690) and upgrade to Accumulate rating. Increase in target price is due to valuation roll forward. In 2QFY26, the core pipes business saw modest growth as strong offtake was offset by weak realizations....
